Non-Resident Landlord UK 2026 — NRL Scheme & Tax Guide

Overview

What is the Non-Resident Landlord scheme?

• The NRL scheme is HMRC's mechanism for taxing UK rental income received by non-resident landlords — those who spend 6 months or more outside the UK in a tax year
• Under the scheme, letting agents (or tenants if there is no agent) are required to deduct basic rate income tax (currently 20%) from rental payments and pay it to HMRC quarterly — unless the landlord has received NRL approval
• NRL approval: a landlord who registers with the scheme and receives HMRC approval can receive rental income gross (no deduction) — they then account for the tax themselves via self-assessment
• The scheme applies to non-resident individuals, companies, and trustees who receive UK rental income
• Residency for NRL purposes is determined by the HMRC Statutory Residence Test — spending 183+ days in the UK in a tax year makes you UK resident; fewer than 16 days makes you non-resident. The middle ground requires the full SRT analysis

How to apply for NRL approval

• Apply using HMRC form NRL1 (individual landlords) or NRL2 (companies) — available on the GOV.UK website
• Apply before leaving the UK, or as soon as you become non-resident
• HMRC will issue an approval notice specifying the date from which the letting agent (or tenant) can pay rent gross
• Notify your letting agent of the NRL approval immediately — provide a copy of the approval notice
• HMRC NRL approval does not remove your obligation to file a UK self-assessment tax return each year — it only removes the withholding obligation from the agent or tenant

Agent and tenant obligations without NRL approval

• Letting agent: must deduct basic rate tax (20%) from all rental payments (gross rent) and pay it to HMRC quarterly using the HMRC NRL Landlord Scheme forms
• The agent issues the landlord with a certificate of tax deducted (Form NRL6) each April, which the landlord uses to complete their self-assessment
• Tenant paying directly (no agent): if the quarterly rent exceeds £100 per week (~£5,200 per year), the tenant must register with HMRC and deduct tax. Below this threshold, tenants are exempt from the withholding obligation
• Agents who fail to comply with the withholding obligation are liable to HMRC for the unpaid tax — not the landlord
• The landlord can still recover overpaid tax via self-assessment — the withholding is a payment on account, not a final tax assessment

Self-assessment for non-resident landlords

• All non-resident landlords must file a UK self-assessment tax return each year, reporting UK rental income
• Allowable deductions: mortgage interest relief (restricted to 20% tax credit under Section 24), letting agent fees, repair costs, insurance, service charges, management costs, professional fees (accountant, legal)
• Personal allowance: non-resident individuals are generally not entitled to the UK personal allowance (£12,570 in 2025/26) — unless they are a citizen of the UK, EEA, or a country with a relevant double taxation treaty
• Double taxation treaties: the UK has treaties with most countries that prevent double taxation of the same income — UK tax paid can typically be offset against tax payable in your country of residence
• Register for self-assessment as soon as you become a non-resident landlord — failure to file attracts automatic £100 penalty plus interest and late payment surcharges